The U.S. has not had legitimate market in 12 years. What we call “the market” is a crude simulation that obscures the Federal Reserve’s Socialism for the Super-Wealthy: the vast majority of the income-producing assets are owned by the super-wealthy, and so all the Fed money-printing that’s been needed to inflate asset bubbles to new extremes only serves to further enrich the already-super-wealthy.
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I always wondered about that. Just print more. But why is there poverty? Because they need us poor.
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Actually, Trace, I agree with the government “printing” money. Talking about “printing” money is a misnomer because the money we’re talking about is electronic. The problem with the money “printing” they’re talking about (quantitative easing) is that all this money government is creating is going directly to banks. The banks are supposed to use it to issue loans but they don’t – they use it to buy back shares (to increase the share price) and to increase CEO salaries and dividends.
I think money creation needs to be restored to the government – at the moment 97-98% of it is created by private banks – but that government should be required to issue money directly into the economy for infrastructure and public programs. This is called sovereign money.
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Of course the debt-backed currency turns economic values upside down. When you start from below the bottom line, what incentive is there to work, earn, or build on negative value? It occurred to me today that the Fed’s constant fiddling with interest rates, in and of itself, destabilizes the economy because no one can depend on value holding stable, while debt is unforgiving. Lowering interest rates may make it easier to borrow, and great if you’re a government on the edge of default, but it makes it harder to save. Money churning works for the Fed and for Wall Street, but it eventually wears individuals down.
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In my mind, Katherine, the debt is inevitable if 97-98% of the money in the economy is created by banks when they issue loans (when they issue the loan they create the money out of thin air – it’s money that didn’t previously exist). That means the only way you can have money in the economy is if a whole bunch of people (including the government) go into debt. If you’ve never seen the movie The Secret of Oz, you should:
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